1:00, and we are live here at Investor Studios when I-Tech has published a report for the third quarter. Joining us here in the studio is the company's CEO, Markus Jönsson. Welcome.
Thank you very much, Mike. Great to be back.
I will soon hand over the word for you to give a presentation, but before I do that, I would like to give a final reminder to our viewers that if you have any questions, then please post them in the chat. Markus, go ahead.
Thank you very much. All right. At first, we start with a little short introduction of I-Tech. The space that we are operating is in the maritime space, the maritime industry, and industrial shipping. We typically pose this question: what if one third of the global fleet of 110,000 commercial vessels were using 36% more fuel than needed, even for a day? What would that mean for operating cost and emission? This is actually then data from our studies of in-docking performance of ships coming in after five years at sea. The picture is this bad. There is much to be done exactly to target biofouling, going forward, and it has huge costs.
I-Tech solution is called Selektope, and it is originally a pharmaceutical ingredient that has been developed as an antifouling substance, and it has a unique property to help stop hard fouling, more particularly barnacles. This helps the ship operators to reduce their emissions to air, to help to protect the sensitive marine ecosystems from the transfer of marine invasive species, and also reduce the emissions to the ocean because Selektope is highly effective and efficient, so you need very small concentration. I-Tech today, then, we have a unique technology. We are focusing on building intellectual property and formulation knowhow around using Selektope and also new solutions now going forward. We are asset-light in the sense that our production is outsourced, and we estimate that our penetration is quite low still, 3,500 vessels out of the commercial fleet of 110,000 vessels.
Our customers are the major antifouling coating producers, the coating companies, and there are actually nine major companies then representing more than 95% of the addressable market. We work, of course, closely with all of them. If we look at I-Tech's journey since its IPO in 2018, it has been a growth journey, essentially. We have grown nearly 30% year-on-year, and we see also that until quarter three this year, we are continuing the growth journey. It's really nice to see that the use of Selektope is continuously increasing. Then we dive into the Q3 results. This, I can say then that the organic growth continues, essentially. If we look at sales or currency-adjusted growth, it is 18% versus Q3 last year. We see then the year-to-date sales grow with all our major customers, which is great to see.
It's a little bit lower sales than the previous record quarter, which was last quarter, Q2, but still a very good quarter overall by our standards. Looking a little bit into the numbers then. Net sales in SEK grew by 19% and reached SEK 48.8 million. The gross margin continued to improve or be more stable at a high level, so 60%, versus 57% last year. EBITDA rose by 16% to SEK 15.1 million, and EBIT then by 20% to SEK 13.3 million. Operating cash flow was lower this quarter than the corresponding quarter last year. However, this is in effect mainly due to skewed accounts receivables because we had a very low sales quarter in Q2 in 2025. The operating cash flow we are seeing now in this period is more resembling, you could say, how it should be.
The cash balance continues to grow, and we have now SEK 177 million year to date. Okay. Looking at the geographical spread of sales then year to date, we can see that Korea continues to cement its number one position. So 46% of our sales year to date has gone to Korea, 27% to Japan, 21% to China, 3% to Singapore, and also 3% to Europe. That is the sales split that we are looking at now. We see continuously strong development from all the Asian markets here, and growth, you could say, in Q3 have been driven a lot by both South Korea and China. To summarize the quarter then, 18% organic sales growth, still very good momentum here. I think the diversification continues.
We see higher growth rates with our smaller customers, which is positive, so we are becoming sort of less dependent on number one or the biggest customer. The margins, we are very happy to see that we have been able to maintain really high gross margins despite the turbulence that has been, you could say, with raw material prices this year, and that we continue to have a strong result in EBITDA and EBIT percentage. All in all, we are very satisfied with the results. Now we come to the outlook, and you have heard me talk also in the previous quarters this year about the market and sort of that we are in, you could say, a mini boom at the moment.
Just sort of zooming in from the bigger picture, there are around 2,000 new vessels being built every year, and there are around 20,000 service events or dry dockings where ship come into service and where they apply a fresh layer of paint. China represents more than 60% of the dry docking market and nearly 60% of the new vessels. China continues to expand their number one position in the market, meaning that it is also one of the key markets for I-Tech for securing additional and future growth. If we look at the market as such then this year, I think the closure of the Strait of Hormuz has meant you could say that the loss of volume here has been able to be mitigated by alternative routes and sources.
In fact, what has been the consequences is that you could say the availability of ships or vessels have decreased, so prices have gone up. We do see, however, that overall seaborne trade has actually gone up year-on-year by 1.1%. The charter rates, which is then sort of the price you have to pay to ship goods, has increased 61%, sort of the overall indexes year to year. We see also then a very active ordering of new ships. So that is up 33% on the full year 2025. It means that we have seen a tremendous bump, and that is actually shown also in the top graph here to the right. You see that the expected deliveries have increased for the years to come, which is of course good.
You could say from an I-Tech perspective, there will be more ships built that need a new fresh layer of antifouling coating. We also see that the shipyard output has increased by 14% year to date. We often talk about the shipyards being full or at their capacity, but we also see that they continuously expand their capacity. Of course, the elevated fuel costs continue really to underscore the value of a premium antifouling solution. All in all, you could say the macros are quite positive for antifouling coatings. We also note you could say an increase in the number of repair events, and this is of course quite linked to the available fleet and their service schedules. But it is all in all a very positive view.
All right, and now we come to the regulatory part. I am really glad to have brought with me another fantastic I-Tech employee for this session. I will hand over now to Cecilia Ohlauson, Head of Regulatory Affairs and Sustainability.
Thank you, Markus. As most of you know, Selektope has been going through a re-registration process in Europe for the approval as an antifouling biocide. This has been a long process. Selektope has been discussed several times by the Standing Committee of Biocidal Products. What has been happening this quarter is that there was a meeting in June with the Standing Committee where a draft proposal for non-renewal of Selektope was discussed. Following that meeting, it was decided that a vote would take place. In the meeting in September, Selektope was not discussed. Following that meeting, a written procedure for voting was launched to the member states, and that is currently ongoing. The voting is running from October 7th to October 21st. As we also indicated before, the approval for Selektope currently expires by the end of this year.
Selektope is not the only antifouling biocide under pressure in Europe. We as I-Tech have tried to draw attention to this problem for several years now. Finally, I would say that European maritime industry is also waking up. With the support of Biocides for Europe and CEPE, a petition has been launched to activate industry in Europe and highlight the risk that we are facing of losing efficient antifouling. To date, there are 30 organizations, companies similar that have signed. Some very influential trade associations have signed, but also shipyards, paint manufacturers, ship owners. The intention is to send this letter to the member states, but also to European Commission, to European Parliament, et cetera, to really highlight the risk that we are facing here. What would be the consequence if Selektope is not approved in EU? What could the impact be?
Well, if we look at how Selektope can be used, there are very few limitations, actually. What is the limitation is that paint containing Selektope cannot be placed on the European market, hence you cannot sell paint containing Selektope within EU. Another limitation is that treated articles cannot be traded within EU. What does that mean? A ship is considered a treated article under the BPR. A ship treated with Selektope-containing paint cannot be sold to a European owner for European, or I shouldn't say European owner, an EU-based owner for EU use. It is a quite small limitation. Roughly 5% of the addressable market would be impacted, while 95% can continue as usual. Port calls in EU continue to be acceptable. Traveling in EU water is continued to be approved. There is a very small limitation here, actually. Yes.
Thank you very much, Cecilia. All right, then we move ahead to the business development pipeline. We had a press release yesterday that we will come back to in just a few seconds. But we can say that we are very much actively working on our opportunity pipeline at the moment. As we have talked about here numerous times, we are looking at what complementing technologies and products we can bring to our existing customers. That could be other active ingredients, that could be complementing technology, such as binder technologies, et cetera, that we have talked about earlier as well. In addition to complementary products and technologies, we are looking at adjacent markets, so other marine markets that have really big challenges with biofouling. Here, aquaculture and the yacht market are in our focus, as you know.
Then shifting gear and talking about the recent acquisition, it's actually a license agreement that we have signed with a company called Titanium Technology. It's a Spanish startup company, similar in profile to what I-Tech looked like 25 years ago. They have actually tested and proved the value of their technology in a number of pilot tests already. But of course, they would highly benefit from an experienced partner like I-Tech in terms of commercializing their technology. So we have then signed a worldwide exclusive license to commercialize their technology within aquaculture. What is their technology then, in essence, right?
They are working with titanium surfaces, and the innovation that they have found is that if you use an electronic control system and you apply a certain type of current or electricity to the titanium material in a varying pattern, that really limits the ability for microorganisms to settle onto the surface. This is mainly, you could say, an electrochemical effect. So you have the charge, the surface charge, and the pH at the surface that is varying, and this is preventing species to settle. So it's not a biocide-containing technology, per se. What this enables then is to create really fouling-resistant structures. For aquaculture, this would mean much smoother operations, right? If you have no fouling, that means that you can have better water flow, you have more oxygen and less pathogens coming into your species that you're growing.
This means that you can reduce significantly the maintenance that is today applied to clean and remove biofouling from underwater surfaces. The really big benefit here, and I think also to the value of both this technology and the ones that we talked about at last quarterly report, is that improved animal welfare and the yield, really. That biofouling actually cause sickness and death among the species that you're growing. So here you have a chance to really improve the yield, which is, of course, a massive economic impact as well for the farm. With this type of technology, you could also envision a much lower environmental impact, since this is an electrical signal and it's not a release of chemicals to the environment.
So all in all, we are quite excited. We also brought to you some pictures today to show you how the technology has been validated to date. These are actually four different pilot validation studies. What you see here furthest to the left is actually a big water tank that is used to evaporate liquefied natural gas. Here you can see the technology then really applied as big sheets of titanium aluminum to keep fouling from growing on the inside of the tank. The second picture is actually a pipe, and you can see on the outside of the pipe, you have a lot of fouling. On the inside where you have the active titanium surface, it is actually completely clean. Same goes for the third picture. Maybe a little bit difficult to see here, but this is a grate.
That sort of filters and gives a basic filtration for the water. Also the picture number 4 in the bottom there is a separate grate. You can see in the frames how much biofouling you have, and also on the top part here of the grate, how much biofouling you have and how clean the underwater surface titanium area is, right? So we have seen, and it has been proven to work really technically. Of course, what remains now is to prove the commercial validity of this technology for various aquaculture applications. Here, there is really the benefit of I-Tech and Titanium Technology working together then going forward. So that was a brief overview of the Q3 results, and coming now to the business outlook.
We are continuing to work very actively with the business development pipeline and the opportunity pipeline, so we can foresee additional strategic partnerships going forward. As you heard from Cecilia, we remain very active on the advocacy side, both linked to the European Union market, but also the U.S. and other markets going forward. So that is another focus area. Of course, the business development now to really make these new interesting technologies fly and to get them out to customers to test them. So, all in all, a quite busy time ahead for I-Tech. Right.
Thank you very much, Markus. I think Cecilia will also be joining us here for the Q&A. For the Q&A, we will soon hear from ABG Sundal Collier analyst, Lara Mohtadi. But before we do that, I extracted a question from the viewer base here in the chat. There is a lot of activity going on there as usual as well. Is Selektope used in the defense industry, and if not, could it?
Well, then I think the spontaneous application that you would think for is, of course, for an antifouling solution for a naval ship, right? To my knowledge, there are no products today that are really specifically targeting the naval segment. But of course, there is nothing, you could say, blocking any of our customers to promote products for naval application.
Mm-hmm. We will now turn to analyst Lara Mohtadi from ABG Sundal Collier. Go ahead and ask your questions.
Yes. Hello. A couple of questions from me. Well, sales, as you said, it was still a very strong quarter. You had 18% organic growth, but it was still down a bit sequentially. What would you say what drove that sequential decline? Is it just simply put, order timing, anything on customer inventory levels, anything else, or how should we think of Q4?
Yes. Well, Lara, as we point out, I think in many quarterly reports, our sales do vary quite a bit between various months. And you could say if one order ends up on one or the other side of a quarter, it can actually have a big impact. We have few customers that place rather big orders. And we tend to say, it is a natural variation. I think overall, we see, with Q3, that the growth momentum we have seen this year is continuing. Of course, Q2, we had very easy comparables to last year, et cetera. So there is the element of natural variation. I would say that that sort of is the predominant effect here.
Very clear. You mentioned the turbulence in raw material prices, the costs that you flagged earlier this year, they haven't really materialized, so we cannot see that in the gross margin. What would you say is the current situation for your key raw materials? Do you still see a risk of higher prices going ahead? To what extent can you pass this onto your customers?
Hmm. Yeah, I think there are two things here. I think the worry is, you could say for I-Tech's margins, but I think the worry is also for our customers, to be able to obtain the appropriate amount of raw materials to produce their products. I think, in the start of Q2, there was really a worry among some of our bigger customers. Because of the disruption of Hormuz, et cetera, will we be able to source enough raw material to meet the demand? So that was really a question you could say in the start of Q2. We see that has sort of settled a little bit now. So availability is not a problem, but you could say raw material prices have sort of stabilized at an elevated level.
You could say that I-Tech had to take action as well during Q2, to adjust prices, of course, work with our suppliers to mitigate the effect. I think, we are quite happy and proud of being able to keep our good gross margin also in Q3.
Yeah. Obviously, you touched on this a bit. You had a very strong gross margin of 60% this quarter. Should we see this as a sustainable level going forward?
Well, this is definitely our, you could say, target. To keep it at a higher level. However, it will vary, as we know, between the mix between different quarters, et cetera. ± 2 percentage points, I think, is reasonable. But it is our clear intention to keep the good margin.
Okay. Also on the operating cost side, you had some license fees and costs related to the acquisition of the aquaculture technology. On the license fee side, is that something that will be recurring?
Yeah.
Basically.
It will be a recurring license fee going forward. The level you could say is performance-based as well. So depending on the success.
Okay. Also, on your aquaculture technology, it's still very early. Can you give some sort of indication or timeline to when you think this will start generating some revenue?
Yeah. Let's start with the technology then, the bio-based additive that we released, you could say, before last quarter. I think that has progressed nicely now. We have set up an internal validation project to look at the performance. We are actively speaking to prospect customers here. It's really difficult to say how far away sales is, but as I think we indicated, within a few years, it should be reasonable. If the technology really matches the requirement and delivers on the promises, it shouldn't be unreasonable to say within a few years, Lara, for this technology. In terms of the new license agreement with Titanium Technology, it's very much early days. We need to focus now on building pilots to prove the value for aquaculture.
You see the pilot test that the technology seems to be working really well to prevent fouling, but this has to be proven then in a commercial aquaculture application as well. That's where we are now. Of course, we are preparing a plan for different applications to validate the performance. But it's really too soon to say when will we have sales and what is the absolute potential that we are going for here.
Okay. Obviously, you mentioned that you are building pilots to prove the value. Would you say, on the commercial ship side, part of the reason for the penetration taking a long time, or what you would call it, is that you have to test on a dry docking period that's five years. How does that cycle look on the aquaculture side?
Well, we talked about that a little bit last quarter as well. I think the good thing with aquaculture is that qualification periods are generally much shorter. I think this is one of the advantages of the aquaculture market. You could say that time to market is significantly reduced compared to our traditional antifouling segments. Hence, it is also why it is part of the attractive properties of this adjacent market.
And just on the cost side, what type of cost should we expect for these technologies? Obviously, it is very early. Should we expect elevated R&D costs? And will these be expensed or maybe capitalized?
No, you should expect us to continue to invest in our organization. To be able to take care of these new technologies and to really develop and commercialize them. We need, of course, resources to do that. However, knowing I-Tech, we will do this in a cautious manner. Also, to balance the cost and what we are able to deliver in the projects. So you should expect a continuously prudent increase of our cost expenditure.
Yes. And if we move on a bit to the EU regulatory process, as Cecilia mentioned, the approval expires at the end of this year. In an event if the vote is negative, are there any sort of transition periods for selling or using existing stock that actually contains Selektope? And when will the actual restrictions take full effect?
Yes, I can take that question. You will have a 180-day transition period when you can sell whatever is available, what you have in stock, et cetera. Of course, the 180 days starts from when the decision comes into force. Not immediately when it's announced in that case. There will be some transition time.
Yeah. I understand it's hard for you to know when a decision will come, but the voting is until, I think you said 17th of October. Do you expect a decision from that, or do you expect an announcement from that outcome shortly thereafter, or?
Yes, so the-
What's that sort of timeline?
Yes, the voting runs until the 21st of October.
21st.
Normally a decision will be announced within one or two weeks, but there is no really fixed deadline for the announcement. So whatever the outcome is, we're in the hands of the European Commission.
But also there's the need for the signature. So it doesn't become law until-
No.
von der Leyen has signed.
Yes.
Okay. So in other words, it could take longer?
Yes.
Okay. Just this final one from me. You mentioned in previous quarters that you wanted to conduct an EOGRT study. Is there an update on this?
Well, we are currently looking into several different CROs or clinical research organizations that could run the study. Since this is a difficult study to run, there isn't that many laboratories that are capable, especially then using Selektope, since it is a sedative and it is a long study. You need to be extra mindful to make sure that whatever effects you might see are due to the relevant endpoints or due to the relevant effects and not sedation per se. So it is a little bit complicated, but hopefully we should have sort of a starting time and a CRO in place within this year.
Okay. So you're still fairly confident that you will conduct this study, or is it still a question of you're going to conduct it or not?
Well, of course, we have said that we plan to run the study, but of course, it will also be dependent on the timeline when the study could actually be started. I think that will be something that we need to take into consideration.
Okay. Thank you. That was all from my end. Thank you very much.
Thank you very much, Lara Mohtadi. Viewer questions remain, and there's a lot of them. I hope we have time for all of them. First of all, new products. How many new Selektope products did customers launch in Q2 and Q3, and how many products were paused because of the EU process?
To my knowledge, we haven't really seen any new launch or any product being paused during Q3.
Mm-hmm. Another question from viewers. What is the reason for the large fluctuation in revenue? Are there any seasonal fluctuation when it comes to I-Tech?
No, I think it's back to Lara's question again. We have a few customers that place rather big orders. The pattern varies between months. It really matters, you could say, in what quarter a certain order ends. That's the main reason for the fluctuation.
Mm-hmm. Speaking of your customer base, there's a lot of questions there. Another question from the chat, how much of Q3 growth came from the recovering second largest customer, and is that what is underlying growth excluding it?
Hmm. A substantial part in Q3, because that has been the picture, you could say, throughout Q1, Q2, and Q3. I think we talked about this already in Q1, that they recovered much quicker than we anticipated. I think it's reassuring to say that that momentum has kept, you could say, through Q1, through Q2, and Q3. Of course, last year, they were buying very little in Q2, Q3. Of course, a big part of the contribution comes from the second biggest customer.
Hmm. Another question regarding the second largest customer. Is its 123% growth restocking or a sustainable run rate? How much of the receivable does it owe?
Yeah. In general, the stocking effect is quite minimal for our type of business. Selektope is a very expensive raw material. It's not something that you want to sit on. Paint manufacturing is a just-in-time business. However, our customers do need to build stock of their own product to be able to service the service or the dry docking market. But I would say that since the growth has sort of accelerated early on in the year and has maintained, you could say, the level throughout quarter one, two, and three, it's at a more sustainable level. That's what you can say.
Mm-hmm. Another question from the chat, "The nine month growth with CMP was 15% versus 35% in the first half, which implies Q3 fell about a quarter. Was that order timing, less Selektope in CMP's formulation? What's the explanation there?
Yeah, I would say mainly order timing. But it could also be related to their production planning.
What is CMP's Q3 change year-on-year?
That number I unfortunately don't have with me today.
Very well. Moving on then, this quarter results contain a lot more non-recurring expense than the usual SEK 1.5 million for the EU BPR regulatory process. Approximately how much expense this quarter was non-recurring?
Well, you have expenses then related to our acquisitions and the license agreement, but I will not go into detail, you could say, how much they are individually.
Precisely, and there came a question from Oscar in the chat as well. "What can you say about your expected investment and cost structure connected to the acquisition in August and the license agreement recently communicated?
The acquisition that we announced in August, it's a one-off. It's an acquisition of a technology. That's essentially how you could view that. With the license agreement, as I was mentioning, this is a recurring license fee, so a yearly license fee, and overall, it is success based, so it will only increase if we are very successful with sales.
Mm-hmm. This is regarding the aquacultural acquisition, correct?
Both of them are for aquaculture.
Right.
Yes.
What is the minimum annual fee for Titanium Technology? What run rate should we be expecting here?
I will not go into those details.
No. There is a question regarding aquaculture. It was a question from a viewer who wanted to know when, and I think you addressed that with Lara Mohtadi, but also, could you describe your competition with TAM?
TAM?
TAM is what the viewer wrote in the chat.
Okay. Well, that one, unfortunately, if they could provide some clarity. Competition, could you read the question again?
Yes. We can go with competition overall in aquaculture.
Okay. Well, aquaculture, you could say, is a competitive market. We are talking about food production here, so of course, margins, in general, are slim. However, biofouling is a major challenge for them. As I was saying also in the presentation today, the impact it has on yield is quite dramatic. So you can imagine if you improve the yield with a few percentage points, that has huge value for an aquaculture farm. So actually, it is that value, of course, that if we can help to enable this additional value, it is an opportunity for us and for our products.
Moving on with more questions from the chat. "What is order visibility for Q4? Are you seeing any customers de-stocking?
I cannot comment really on Q4. It's not forward-looking.
Are owners deferring dry docks because of higher charter rates? Your reports show repair activity only 3% above 2025 run rate.
Mm-hmm. As I was mentioning, repair rates or sort of the number of ships that goes into repair is very much decided, you could say, by how many ships you have that was built, you could say, five years, or serviced five years ago. That has a natural variation rather than, you can say, it's high economic activity. The ships have to go into maintenance after five years. It's simply a function of the number of ships that are supposed to go into dry dock. We merely had it to illustrate that there is really, you could say, an upward momentum and high activity in shipyards overall.
Mm-hmm. The viewer in the previous question regarding competition says that TAM is, of course, total available market, which I think we touched on.
Yeah.
Moving on then, can you elaborate on how the new build VLCC order book affects your sales going into 2027, 2028?
It won't affect us that quickly. I think these ships that are being ordered now, they will be coated in approximately three years. So, it's that sort of time lag that we have. Of course, then in three, four years, we hopefully will see an uptick then for the VLCC.
Mm-hmm. Another question, can you add some color on staff costs?
Well, they have increased this year, because, and we talked about that in earlier quarter as well, we have invested in our organization. So all in all, we've added three FTEs this year on top of the level we had last year.
Mm-hmm. The level you have here at Q3 of SEK 5.5 million, is that the new quarterly run rate investors should expect?
Yes, approximately, yes.
Moving on then. Do you finally see any other competing technologies in commercial shipping antifouling, which are starting to gain commercial process, or are these solutions still in development?
Well, I think there are many solutions, you could say, competing for this space. We talked, I think, earlier about silicone coatings as being sort of a rather new, if you talk about in shipping terms, a new technology that is taking market share. A lot of people are talking about proactive and reactive cleaning as an alternative to antifouling. We cannot really see that there is an alternative technology that is massively gaining momentum. I think antifouling coatings is really the key technology that you need to create the preconditions of keeping your ship hull clean.
Hmm. Cecilia, here comes some regulatory questions, some more of those. If the non-renewal passes, what are the timelines for entry into force and grace periods for paint stocks and coated vessels? When will you file the legal challenge?
Well, we don't know exactly when a possible negative decision comes into force. Based on other substances that have faced similar challenges, I would say likely within this year. Then we have the 180-day grace period. So that is then affecting both antifouling coatings, so paints, and then vessels that are placed on the European market.
There's another question here, perhaps to you, perhaps to Markus, I'll let you decide that. Given that EU non-renewal now is potentially likely, could you please share how discussions with Asian paint manufacturer are progressing and your assessment on potential impact on Selektope sales in Asia?
Yeah. We, of course, keep a very close dialogue with our customers. What Cecilia Ohlauson showed you today was sort of a snapshot of what we expect to be the consequences of a non-renewal. So of course, we keep a close dialogue to support our customers. There are many questions today, when will this happen? What is the grace period, et cetera. So it's really key for us to be very close to the customer. So we have, you could say, an ambitious communication plan for this autumn and into next year as well. On one hand, and of course, to inform them about the process, but also then, if there should be a negative decision, what are the implications for you? So, that's the plan really to stay close to our customers.
Next question, how should investors think about the terminal value of the company when patents expire?
That is a very, very tricky question, I would say. Patents are very important, but you also have other things, right, that really defines your stickiness. I think the regulatory approvals is clearly one thing as well, right, on top of the patents that give you stickiness. I think also, in our case, we have patents, you could say, of course, the original patent for using Selektope as an antifouling coating, right, or antifouling biocide, sorry, that has expired, but there are a number of formulations patents, there are production patents, et cetera. We also recently filed new patents for Selektope containing products. So of course, we try to keep an ambitious agenda of strengthening the IP going forward. So it's really difficult to say, the terminal value-wise.
Is that really linked to the patent or to I think it's linked to the overall market, and of course, what potential decisions competitors may take in the future, right, and how they then enter the market, et cetera.
There's a group of question that came in here just as we're about to finish, so I think I'll read those while we still have the time. Speaking of patents expiring and potentially adding new products, is there any revenue right now from other things than Selektope? If not, when could that come?
Now, at the moment, Selektope is our only product. We just recently acquired these technologies. We have, you could say, also on top of these external technologies, we have internal product developments that will be launched, hopefully, also within, you could say, the coming one to two years. Then these new technologies, as I was mentioning, the biological derived additive, also within the coming years. It's difficult to say exactly. So two to three years, potentially. With Titanium Technology, it's too soon to say. But definitely the ambition is that I-Tech will have more products, you could say, to base our growth on going forward. As you can see then, we clearly take concrete steps to make this happen at the moment.
The same viewer asks, "How much of your revenue comes from dry docking, and what is the customer concentration?
Yeah. We try to assess, you could say, how much of our Selektope sales goes into new build versus dry docking. It's quite easy with the South Korean market, because South Korea is a new building market. There is not much service happen there. We know that our sales that goes to Korea is mainly or predominantly into new build. Japan is a little bit different. It's more 50/50. Then, as you could see with China, it's also close to 50/50. But we assess that still around 60% of Selektope sales goes into new build, 40% to the service market. Again, to grow in the service segment is also linked for us to grow in China. So this is the number one service market that we need to really address better going forward.
If I remember correctly from the presentation, 3% of your revenues come from Europe, right?
Yes.
Yes. That was one of the questions.
Year to date. Year to date.
Year to date. Overall, how much share of revenue is from Europe?
Last year, I believe it was four, and the year before that, it was only two, three. Right? So it varies a little bit. It has grown, you could say, this year, right? Yeah. A little bit.
Following along then, are there any I am sorry. The reapproval process for Selektope in the EU. Cecilia, we do not have a result yet, but do you think that it will be reapproved?
Well, that is a very difficult question. There have been meeting notes from the meeting taking place in June, which indicate that there are member states that do not agree with the current development, where EU has proposed a non-approval. It is very difficult to say. I remain hopeful, which I think you might need to be in regulatory affairs in general. But, I do not want to speculate.
Do you share that view, Markus?
Yeah. Well, to add some color to that, I think what Cecilia is saying, we tend to see that the member states tend to vote in accordance with the proposal from Europe, right? Which then you could say speaks to our disadvantage. But as Cecilia was mentioning then, a number of states have at least voiced concerns here, right? And to my understanding, it only takes four member states to vote no to this proposal for there to be a blocking minority, which means that then there is not a yes, and they cannot actually implement the legislation. Of course, we remain very hopeful that there will be four European member states that actually do recognize the value, right, going forward. But again, we should not stand here speculating.
Continuing on, Markus, another question, what is normal run rate Q4 2024 and Q1 2025 were good, as the viewer calls it, and the rest of 2025 were "bad." What are normal levels?
What are normal for a growth company, right? We do identify ourselves as a growth company, but of course, everybody asks me, "So how much growth will you deliver? What is your plan for the individual year?" We do not release that externally, unfortunately. But we identify ourselves as a growth company. We want to deliver, you could say, more than double-digit growth. That's definitely our target. But to say exactly how much that growth will be year on year is difficult because of the industry that we are in and the variations we see from customers. So typically, we have this variation seen between months and quarters. But what happened last year was the second biggest customer coming back and say, "No, we revise our forecast for the year.
Despite the fact that we grew very nicely with the biggest customer, CMP, and all the other customers. We had really good growth numbers last year. However, that was completely drowned by the negative effect of the second biggest customer. So we are dependent on the development of our customers going forward. And it does vary.
You're exiting the quarter with a cash position of SEK 177 million , and there's a viewer in the question again who asks, "Why won't you launch a share buyback?
Yes, and to our understanding, we are not allowed to, being noted on Nasdaq First North. However, there is a proposal to change this regulation. We are awaiting that, and if that happens, you could say, before the end of this year, then of course, we have another tool to address the value share with our shareholders going forward.
Dividends or share buybacks, is there any favoritism in that?
We hear both requests, right? I would say many people, of course, love dividend, but some feel that it's better spent money to do share buybacks. Let's look at doing both and what makes sense, I think.
Mm-hmm. What is the plan with the cash position right now?
Well, it is to invest in the business. As we said, the business development opportunity, the pipelines, we need to preserve cash for regulatory approvals, quite costly. Also to invest in our operations going forward. But definitely, we will be looking at how can we give more of this back to the shareholders. There is no point in having a too high buffer neither.
Before we move on to the final question here in the chat, I would like to remind our viewers that if you have a question, now is the perfect time to ask it before we wrap up. Is Selektope in silicones yet?
Not to my knowledge, but we hope it should be. It's one of the innovations that we are slowly but surely bringing to the market.
Mm-hmm. There came in another question here. How much is spent on regulatory approvals?
I don't have the exact figures, but I think you could compare I-Tech's external spending before 2023 and now, and you can see the difference. It is a quite costly exercise.
Markus Jönsson, Cecilia Ohlauson, thank you very much for being here answering our questions and also, of course, presenting.
Thank you very much.
Thank you.